KPMG tasked with restructuring of construction group Clugston

12 December 2019 2 min. read

Construction outsourcing firm Clugston Group has entered administration, resulting in the laying-off of some 150 staff. Remaining employees will now assist the administrators with the sale of valuable contracts.

The Clugston Group is a construction and civil engineering business, which also specialises in property development and logistics. The group based in Scunthorpe, North Lincolnshire, operates from 25 sites across the North and Midlands. It has operations in  construction, civil engineering, logistics, property development and facilities management.

It is understood to have suffered significant financial problems in relation to a number of energy-from-waste (EfW) projects, in line with fellow contractors Costain and Interserve. As a result, Clugston filed for administration in early December.

KPMG tasked with Clugston restructuring

KPMG was appointed to take the process forward, with James Clark and Howard Smith from the Big Four’s restructuring practice installed as joint administrators to Clugston Group and Clugston Construction. On top of this, Chris Pole will support Clark as joint administrator for Clugston Services. Clugston Distribution Services and Clugston Estates are not affected by the collapse, and will continue to trade under the control of their directors.

The group reportedly collapsed owing over £40 million, while some 250 employees are reportedly set to lose their jobs as a result. Around 400 of Clugston’s 629-strong workforce were employed in construction, and less than a week into the administration, 150 were reported to have been made redundant. The remaining Clugston employees will the administrators in “seeking to sell valuable contracts,” while continuing to trade in certain divisions.

James Clark commented, “The directors of the business have worked tirelessly trying to rescue the group and have pursued discussions with a key stakeholder about a potential rescue deal. Unfortunately, it has not been possible to obtain the funding required, and as a result, the directors concluded they needed to appoint administrators to protect the value of business… Our focus over the coming days will be to seek buyers for the contracts and divisions, and to liaise with those employees who have been made redundant, ensuring they are provided with the support and information they need.”